The U.S. has signed a more than $3 billion deal with Lockheed Martin (LMT.N) and Northrop Grumman (NOC.N) to ramp up production of Patriot and THAAD interceptor missile parts, as conflicts in Iran and Ukraine strain stockpiles.
The deal, announced by the Pentagon and Northrop on Monday, follows last week's announcement of a contract for Lockheed worth up to $58.6 billion to produce Patriot interceptor missiles.
The U.S. has supplied large amounts of arms to allies while also using munitions in the Iran conflict, raising concerns about inventories of air defense and precision-guided weapons.
The Pentagon said in its statement on Monday that the framework deal would allow production of Patriots to triple and THAAD systems to quadruple.
The Center for Strategic and International Studies, a Washington-based think tank, estimated recently that the U.S. military has fewer than 1,000 Patriot interceptors on hand and fewer than 250 THAAD interceptors — two key air defense systems. Both have been heavily used in the Middle East.
Pentagon negotiators have pressed contractors to move faster with tentative production agreements struck earlier this year to increase missile output.
The Pentagon said the agreement would establish a second source for PAC-3 solid rocket motors and ramp up output of ignition safety devices.
The U.S. has struck a similar framework deal with Raytheon's parent company RTX (RTX.N) to boost production of Tomahawk cruise missiles from the current rate of about 60 per year for the U.S. to eventually 1,000 units annually.
